“The market is oversupplied and increasing production will not affect prices,” the oil minister said when asked whether an OPEC output hike would lower prices, which hit nearly US$128 per barrel on Friday.

Saudi Arabia said that global supply was balanced with demand, but added that it had increased production by 300,000 barrels per day this month.

Iran is OPEC’s No. 2 and the world’s fourth-largest exporter of oil.

When prices reached US$115 a barrel last month Iranian President Mahmoud Ahmadinejad said oil was priced too low and that the commodity “should find its real value.”